Simulated Economy in Middle Grades – “Adams School of Economics”By Todd R. Nelson
Let’s just say that economics begin when the hunter-gatherers decide to settle down and farm. Oh, sure, nomadic tribes trading with one another, or even swapping herds of cattle and sheep from glen to glen to prevent over-grazing in the highlands (also known as rustling) have a certain rough system of exchanging resources. But in 7-8th grade social studies we’re examining economic settlements, not the free-range variety. We have been simulating economic systems beginning with a simple, agrarian economy: 7 farms, each with three fields and two farmers, a standard yield of 5 conkers per field. Harmony. Sustainability. No money. No fancy technology. The known agrarian micro-world has enough food for its population and everyone is surviving just fine. There are no defined borders or awareness of neighboring states. Sustainability, however, is hard to achieve and hard to maintain. How long can this last? The Adams School of Economics is simulating models that are dynamic.
“What could happen to your simple lives?” I asked the farmers. “What uncertainties do you need to plan for? What are your tools for coping with randomness and the unexpected?” Enter the Malthusian variables! Our farmers had good suggestions for effective tactics.
How about entrepreneurialism: “How might you improve your farms? What is your concept of betterment? What are some good things that could happen, or that you could make happen?”
Having too much or too little can be a problem: drought or deluge, overpopulation or under-population, insufficient land for the required crops, too much land for the current population to manage. Add locusts, stampedes of marauding wildebeests, theft–trouble. To which someone proposed the concept of fertilizer, which leads to improving crop yields, which can sustain larger populations, which can farm more land, raise more crops…have more children. I imagine the weevil population would be watching with interest. So many things to balance! More mouths to feed! Yikes! Life is full of incentives and disincentives.
Our simulation runs on “seasons” in which the locals make moves to cope and resources are grown and consumed, followed by the injection of a new concept or event and the resupply of those resources—or not. So on Tuesday, in our first growing season, six farms decided to simply combine resources (and liabilities!), while one farm traded some of their land for extra crops. Then we debriefed.
“We now have three super farms and one original-sized farm,” I noted. Looking a little closer, we saw that the society had changed. The small farm had more than enough food to survive, leveraged by trading land. In their next season, they would need to restore their ratio of land-to-crop yield—or face starvation. And one of the super farms had lost food, but gained land: someone was going hungry. Economics is about scarcity, supply, and consumption.
Pestilence entered the simulation. “Each farm will have to draw a card,” I explained. “They will draw either more land, with accompanying crop production, or they will draw a card for crop failure…and lose food.”
One by one, the farmers drew. Now we had salvation for the small farm, and hard times for one of the super farms. What’s more, the entire society realized that crops were disappearing from the overall economy, and land was entering. In other words, whatever affected one, affected all. “That’s not fair!” said one farmer. Things are not always fair. Economics is about cause and effect, not justice…as of yet.
Incomers can throw things into a tizzy. “We are the Digigoths,” said a message on Wednesday. “We come from the East—and we are hungry. We usually drink the blood of our horses, but we’ll settle for your putrid conker porridge. Feed us, or we’ll kill all your children. Each farm must pay 7 conkers—or try and defeat us on the field of battle. Good luck with that, you pathetic farmers!” Can emigration be far behind?
Other kinds of protection, and protectionism, could arrive. “I am a warrior. I will protect you from invaders. In return for protection, you will feed me and my knights and call me King Beneficent. Each farm now owes me 5 conkers per season.” Yes, they always say they’ll be Beneficent, those monarchs. He has a younger brother named Maleficent. Can revolution be far behind?
Boom times and busts are also in the offing. The society will grow more complex. Money will be printed; new roles emerge, like merchants and tradesmen. Not everyone can survive as a simple farmer; new tools will be invented; the rise of the merchant and manufacturing classes is on the horizon. Payrolls, taxes, services, credit, and government join the evolution as we use our scale model to understand macro forces. On Tuesday, we already made a comparison between spending and stimulation: conker sales urge the expansion of farming…kind of like shopping after Thanksgiving. Economics is about conspicuous consumption.
Yes, whether it is in the form of nomadic tribes or hedge fund managers, with their ugly cattle and dreadful social graces, we’ll test whether “greed is good.” Perhaps there’s a future in dairy herds? There’s rain and pestilence in the long-range forecast. Conker prices are volatile; interest rates fluctuate. Land prices are on the rise; population too. Should the government subsidize the conker/dairy/leather market? Might be time for a massive public works project to stave off unemployment and recession. Would a New Deal quell barbarians at the gates? More fundamentally, will 7th and 8th graders be able to balance their checkbooks?
About Todd Nelson